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Sunday, March 14, 2010

Stuart Hertzog's Presentation to the CRD CALWMC

March 10, 2010

Good evening.

My name is Stuart Hertzog and I spoke to you this morning about the impact of this project on greenhouse gas emissions. I calculate that in 40 years, this project would add 1.6 Megatonnes of CO2e to the global atmosphere. On that basis, this project should not go ahead.

Because it would create environmental and financial problems where none existed before, many people, including myself, are wondering why you have embarked on such an ill-advised path. Perhaps the answer lies in the push by the BC government to privatise public utilities?

There is no doubt my mind and the minds of many others, that this entire project has been mandated by the BC government's desire to privatise municipal sewage services. But the public response you have been receiving points to considerable concern about this. There is strong public support that the CRD's sewage system should be publicly owned and operated.

You are asking the public to choose from a menu of six procurement options, from the public Design Bid Build to the P3 Design Build Operate Maintain. But there is another option that has not been included, which is not to proceed at all with this billion-dollar mega-project. There is considerable public support for that option, too.

This public 'involvement' process is manipulative and meaningless without including "none-of-the-above," which I suggest is the best choice.

Without the option of not proceeding, you are faced with three political solutions to the thorny issue of ownership and procurement: a fully-public system; a hybrid mix of public and private; and a full P3 package.

Because you must somehow assuage the public fear of privatisation, there is no doubt in my own mind that you will favour the politically less-damaging, 'hybrid' solution. That way you can appear to be fair and balanced -- except that this will be the worst possible choice.

This 'hybrid' solution is in fact a P3, in which the heart of this project -- ownership and sale of the revenue-producing streams of biogas and biosolids -- will be moved into private hands, while the costly, non-revenue, supporting infrastructure, will be paid for with public funds.

The devil is hidden in the details. The draft Business Case presented by Ernst & Young last week, recommended that both the West Shore and the Victoria biosolids plants be P3s. I suggest to you that these two plums are of great interest to the private sector.

These two plants will receive the liquid waste streams from the entire Capital Region District. They will dry and process them to produce methane biogas for internal process use, with any surplus for sale to Terasen Gas. The operator will sell the biosolids as cement kiln or municipal waste incinerator fuel. The CRD will be reduced to a supplier of liquid waste at public expense.

It's the perfect money machine. The plant operator is guaranteed a flow of feedstock, which it can process as cheaply as possible. It can then resell its products to the highest bidder, maybe even while being paid to process the sewage -- it all depends on the details of the contract.

Who would own the incoming feedstock? Who would own the biogas and biosolids produced? What about any future carbon credits -- who will own these valuable, tradable assets? These details are vitally important to the regional taxpayer -- but we aren't being asked about those, nor are we likely ever to learn exactly what will be negotiated on our behalf.

Should these two plants be privatised, we know that the financial and operational details of any contract will be hidden from public view on the grounds of commercial secrecy. Yet these contracts could contain minimum and maximum flow requirements that could limit the ability of the CRD to fulfil other policies, such as water use and greenhouse gas reduction.

You are asking the public to choose between just six models of procurement, while the devilish details are hidden in carefully-crafted reports that suggest privatising these two key plants.

That's like Henry Ford saying "you can have any colour car you want -- as long as it's black."

By choosing the hybrid option, you will be still turning over the valuable assets of a municipal service to the private sector, while asking the public to pick up the tab. This doesn't seem right to me, nor to the majority of the voting public in your municipalities.

The decisions you will be making in the next months are crucial, both for the financial stability of the CRD and each for municipality; for public health; and for the global environment.

Do not deliver valuable CRD sewage assets into the hands of a private operator while calling it a "hybrid" solution. This would be subterfuge and sleight-of-hand.

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